M/s. Rukmani Infra Projects Pvt. Ltd., Bhubaneswar V. ACIT(TDS-1), Bhubaneswar

ITA 445/CTK/2015

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 3718 (ITAT-CUTTACK)
• Duration Of Justice: 1 year(s) 7 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-07-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2013-2014
• Appeal Filed On: 23-11-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D K PRADHAN
• Section: 6

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL CUTTACK BENCH CUTTACK BEFORE SHRI N.S.SAINI, AM & SHRI PAV AN KUMAR GADALE, JM ./ ITA NO. 444 &445 / CTK /20 1 5 ( / ASSESSMENT YEAR : 20 11 - 20 12 ) M/S RUKMANI INFRA PROJECTS PVT. LTD., 242, DISTRICT CENTRE, CHANDRASEKHARPUR, BHUBANESWAR VS. ACIT, (TDS - 1), BHUBANESWAR ./ ./ PAN/GIR NO. : A A BCH 3970 L ( / APPELLANT ) .. ( / RESPONDENT ) /AS SESSEE BY : NONE /REVENUE BY : SHRI D.K.PRADHAN , DR / DATE OF HEARING : 1 3 / 0 7 /201 7 / DATE OF PRONOUNCEMENT 14 / 0 7 /201 7 / O R D E R PER SHRI PAV AN KUMAR GADALE, JM : TH E SE ARE THE APPEALS FILED BY THE ASSESSEE AGAINST THE DIFFERENT ORDERS OF THE CIT(A) - 3, BHUBANESWAR, PASSED IN ITA PPEAL NO. 0324 / 2013 - 14 , DATED 6 - 8 - 2015 U/S. 201(1)/201(1A) OF THE INCOME TAX ACT, WHEREIN THE ASSESSEE RAISED ONLY ONE SUBSTANTIAL GROUND THAT THE CIT(A) HAS ERRED IN CONFIRMING THE ADD ITION IN RESPECT OF INTEREST PAID TO THE FINANCIAL COMPANIES WITHOUT DEDUCTION OF TDS WHERE SUCH FINANCIAL COMPANIES H A VE DISCLOSED INTEREST INCOME IN THEIR INCOME TAX RETURNS AND COMPLIED THE INCOME TAX PROVISIONS . 2. SINCE THE ISSUES INVOLVED IN BOTH TH E APPEALS ARE IDENTICAL, THEREFORE, THE APPEALS HAVE BEEN HEARD AND ARE BEING DISPOSED OFF BY THIS CONSOLIDATED ORDER. FOR THE SAKE OF CONVENIENCE , WE SHALL TAKE THE FACTS AND GROUNDS RAISED IN ITA NO. 444/CTK/2015 (AY : 2011 - 12) FOR DECIDING BOTH THE APPEA LS. ITA NO. 444 /1 5 2 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE COMPANY IS AN ENGINEERING , CONSTRUCTION WORK IN DIFFERENT STEEL AND POWER PLANTS IN INDIA. THERE WAS A SURVEY OPERATIONS U/S.133A OF THE ACT CONDUCTED IN THE ASSESSEES BUSINESS PREMISES AND THE INCOME TAX DEPARTMENT FOUND THAT THE ASSESSEE HAS OBTAINED LOANS FROM VARIOUS NON BANKING FINANCIAL COMPANIES (NBFCS) AND NO TDS WAS DEDUCTED AND, THEREFORE, PROVISIONS OF SECTION 194H OF THE ACT ARE APPLIED. THE AO ISSUED SHOW CAUSE NOTICE ON 10.12.2013 , REFERRE D AT PAGE 2 OF THE ASSESSMENT ORDER. IN COMPLIANCE, LD. AR OF THE ASSESSEE FILED REPLY ON 30.12.2013. THE ASSESSEE MADE AGGREGATE INTEREST PAYMENT S OF RS.52,97,668/ - IN RESPECT OF 9 PARTIES AND THE AO FOUND THAT SUCH PAYMENTS ARE WITHOUT DEDUCTION OF TAX A T SOURCE AND PROVISIONS OF SECTION 194H ARE APPLICABLE. THEREFORE, THE LD. AO RELIED ON THE PROVISIONS OF SECTION 40(A)(IA) OF THE ACT AND MADE DISALLOWANCE AND RAISED THE DEMAND OF NON - DEDUCTION OF TDS U/S.201(1) AT RS.5,29,792/ - AND RS.2,13,620/ - U/S.201 (1A) OF THE ACT, VIDE ORDER DATED 28.1.2014. 4. AGGRIEVED BY THE ORDER OF THE AO, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(A) . IN THE APPELLATE PROCEEDINGS, LD. CIT(A) ON THE DISPUTED ISSUE IN RESPECT OF ASSESSMENT YEAR UNDER CONSIDERATION FOUND THA T THE ASSESSEE HAS MADE THE PAYMENTS TO THE FINANCE COMPANIES WITHOUT DEDUCTION OF TDS AND THE ASSESSEE COULD NOT SUPPORT WITH ANY PROOF OF RECIPIENT OF INTEREST H AS OFFERED SUCH INCOME IN THEIR INDIVIDUAL ASSESSMENTS. SINCE NO MATERIAL WAS SUBMITTED, THE CIT(A) CONSIDERED THE ITA NO. 444 /1 5 3 SUBMISSION AND CONCORD WITH THE FINDINGS OF AO AND DISMISSED THE ASSESSES APPEAL. 5. AGGRIEVED BY THE ORDER OF CIT(A), THE ASSESSEE HAS FILED AN APPEAL BEFORE THE TRIBUNAL. 6. SINCE NONE APPEARED ON BEHALF OF THE ASSESSEE, LD. DR ARG UED ON THE DISPUTED ISSUE. 7. WE HEARD THE SUBMISSIONS OF LD. DR AND PERUSED THE MATERIAL ON RECORD. PRIMA FACIE , WE FOUND THAT THE ASSESSEE HAS OBTAINED LOANS FROM NBFC FOR THE PURPOSE OF PURCHASE OF CRANES AND VEHICLES AND ISSUED POST DATED CHEQUES IN R ESPECT OF PRINCIPAL AMOUNT AND INTEREST . THE ASSESSEE AS PER THE AGREEMENT WITH NBFC HAS TO BE PROVIDE POST DATED CHEQUES. ON PERUSAL OF THE ASSESSMENT ORDER, WE FOUND THAT THE ASSESSEE HAS PAID THE INTEREST TO NBFC S WHICH ARE OF THE BUSINESS HOUSES AND ALSO THE ASSESSEE COULD NOT SUBSTANTIATE ITS CLAIM BY SUBMITTING THE DETAILS OF OFFERING INTEREST INCOME BY THE RECIPIENT NBFCS I N THEIR INCOME TAX RETURN S . FURTHER, LD. CIT(A) HAS OBSERVED THAT THE ASSESSEE RELIED ON THE DECISION OF THE M/ S . HINDUSTAN CO CA COLA BEVERAGE S PVT. LTD., 293 ITR 226 (SC) BUT COULD NOT SUPPORT THEIR STAND WITH THE PROOF OF INCOME TAX RETURNS OF NBFC AND CERTIFICATE FROM THE CA THAT INTEREST HAS BEEN PAID TO RESPECTIVE NBFCS HAS BEEN OFFERED FOR TAXATION PURPOSE. WE ALSO PERUSED T HE AMENDMENT OF SECTION 40(A)(IA) [ OF THE ACT, WHERE AN ASSESSEE FAILS TO DEDUCT TDS WHOLE OR ANY PART OF THE TAX IN ACCORDANCE WITH THE PROVISIONS OF CHAPTER XVII - B ON ANY SUCH SUM BUT IS NOT DEEMED TO BE AN ASSESSEE IN DEFAULT UNDER THE FIRST PROVISO TO SUB - SECTION(1) OF SECTION 201 ITA NO. 444 /1 5 4 OF THE ACT AND , THEN FOR THE PURPOSE OF THIS SUB - CLAUSE, IT SHALL BE DEEMED THAT THE ASSESSEE HAS DEDUCTED AND PAID THE TAX ON SUCH SUM ON THE DATE OF FURNISHING OF R ETURN OF INCOME BY THE RESIDENT PAYEE IN THEIR INCOME TAX R ETURNS. WE ARE OF THE CONSIDERED VIEW THAT IN THE INTEREST OF SUBSTANTIAL JUSTICE ONE MORE OPPORTUNITY BE PROVIDED TO THE ASSESSEE TO SUPPORT ITS CLAIM BY FILING EVIDENCE OF OFFERING OF INCOME BY THE RECIPIENTS IN THEIR INCOME TAX ASSESSMENT AND THERE IS NO LOSS OF REVENUE. ACCORDINGLY, WE REMIT THE ENTIRE DISPUTED ISSUE TO THE FILE OF AO FOR VERIFICATION AND EXAMINATION OF RECIPIENT NBFCS INTEREST INCOME IN ACCORDANCE WITH LAW AND THE AO SHALL PROVIDE ADEQUATE OPPORTUNITY OF HEARING TO THE ASSESSEE TO FIL E EVIDENCE TO SUPPORT ITS CLAIM BEFORE PASSING THE ORDER. ACCORDINGLY, THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 8. SIMILAR APPEAL IS FILED BY THE ASSESSEE IN ITA NO.445/CTK/2015 (AY : 2013 - 2014), WHICH IS IDENTICAL TO THE FACTS AND D ISPUTED ISSUES RAISED IN APPEAL OF THE ASSESSEE FOR A.Y.2011 - 2012 AND DECIDED, THEREFORE, TH E PRESENT APPEAL IS ALSO REMITTED TO THE FILE OF AO FOR VERIFICATION AND EXAMINATION OF RECIPIENT INCOME AND THE AO SHALL PROVIDE ADEQUATE OPPORTUNITY OF HEARING TO THE ASSESSEE TO FILE EVIDENCE IN SUPPORT OF ITS CLAIM BEFORE PASSING THE ORDER. ACCORDINGLY, WE ALLOW THE APPEAL OF THE ASSESSEE FOR STATISTICAL PURPOSES. 9. IN THE RESULT, APPEAL S OF THE ASSESSEE (ITA NOS.444&445/CTK/2015) ARE IS ALLOWED FOR STATISTICAL PURPOSES. O RDER PRONOUNCED IN THE OPEN COURT ON THIS 14 /07 / 201 7 . SD/ - ( N. S. SAINI ) SD/ - ( PA V AN KUMAR GADALE ) / ACCOUNTANT MEMBER / JUDICIAL MEMBER ITA NO. 444 /1 5 5 CUTTACK ; DATED 14 / 0 7 /201 7 . . / PKM , SENIOR PRIVATE SECRETARY / COPY OF THE ORDER FORWARDED TO : / BY ORDER, ( SENIOR PRIVATE SECRETARY ) , / ITAT, C UTTACK 1. / THE APPELLANT - M/S RUKMA NI INFRA PROJECTS PVT. LTD., 242, DISTRICT CENTRE, CHANDRASEKHARPUR, BHUBANESWAR 2. / THE RESPONDENT - ACIT (TDS) , BHUBANESWAR 3. ( ) / THE CIT(A), 4. / CIT 5. , , / DR, IT AT, CUTTACK 6. / GUARD FILE. //TRUE COPY//